For the first time in nearly five years, total US oil production is declining on a year-over-year basis.
After a roughly 30% drop in active rigs over the past three years, improved drilling technology has not been enough to compensate for reduced capital investment, proving that fundamentals ultimately prevail. Despite this tightening supply, oil remains one of the most heavily shorted assets in over a decade, raising the question of whether prices could be poised for an upward move. Source chart: Tavi Costa
The January jobs report just SMASHED expectations.
Establishment Survey showed 130k new payrolls, well above 65k consensus estimate – and ahead of “whisper numbers” that were closer to 50k or even lower. This is the strongest number since April 2025... And here’s the kicker: -34,000 GOVERNMENT jobs. Private sector up. Government down ‼️ According to Household Survey, employment jumped by 528k in January, pushing the unemployment rate down to 4.3% from 4.4% in December. US Treasuries are selling off in response, with US 10y yield up 6bps. This better than expected report has caused odds of a rate cut in March to drop from around 20% to 6%. Source: Bloomberg, HolgerZ
So much for a hawkish incoming Fed chair.
Kevin Warsh, nominee for Fed Chair, has proposed a “New Fed-Treasury Accord” inspired by the 1951 agreement that granted Fed independence. The plan aims to restore Fed independence, shrink its $6.6 trillion balance sheet, and clarify roles between the Fed and Treasury. The Fed would focus on short-term rates and price stability, while the Treasury manages bond markets. Warsh also favors less forward guidance, letting the Fed react to data rather than constantly signaling. The goal is to prevent the Fed from becoming a tool for cheap government borrowing, modernize its balance sheet, and protect its ability to fight inflation.
China urges banks to curb us treasuries exposure on market risk
Source: Bloomberg
I disagree with this headline from CNN
Gold is not rising because of Trump. It is rising because the US has $39 trillion in debt, $2 trillion in annual deficits, 25% of tax revenue goes to interest payments and Congress refuses to stop. They thus need to go through monetary debasement. This is not a bug. It is a feature of the system. And store of values are one of the way to protect purchasing power. By the way, Europe and Japan have similar debt and spending problems. Gold is at record highs against every currency, not just the dollar. Source: Wall Street Mav
Foreign ownership of US debt rises to an all-time high.
Source: Daniel Lacalle @dlacalle_IA Bloomberg
The United States now produces more oil than Saudi Arabia and Russia combined
This also explains why oil shocks today tend to be shorter-lived than in the past. There is simply more swing capacity in the system, and a lot of it sits in the US... Source: Jack Prandelli @jackprandelli
Institutional investors sold -$9.2 billion in US equities last week, marking the 5th straight week of selling.
They dumped -$8.1 billion in single stocks and $1.1 billion in ETFs, bringing the 4-week average to -$3.5 billion. On the other hand, hedge funds bought for a 5th consecutive week, while retail investors bought for the 2nd straight week. As a result, net selling rose to -$6.3 billion, from -$2.6 billion in the prior week. Source: BofA, Global Markets Investor
